Thursday, May 31, 2012

Tax Policy and CEO Compensation

This graph shows the rapid increase in the use of restricted stock grants and the decline in stock option in executive compensation.  This corresponds with the Bush tax cuts that lowered the tax rate on dividends.  This explains the motivation for the Bush tax cuts on dividends and the rapid shift in executive compensation.  Since dividends are paid on restricted stock grants, there has been an increase in dividend payouts by large corporations.

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